Funders Together Resources
At our 2016 Funders Institute, we focused on two very important topics for philanthropy: equity and advocacy. As part of an ongoing effort to provide support and programming on both issues, we've compiled resources that can aid you in starting and continuing the conversation around these topics in your work to prevent and end homelessness.
Funders can and should be advocates for policies and funding streams that can end and prevent homelessness. Understand the legal restrictions on private foundations’ advocacy efforts with this resource.
While there are numerous policies that may affect homelessness services and prevention, we stand behind these key policy principles.
From Our Members
Campion Foundation - Advocacy Spectrum and Tools
Published by Council on Foundations, this report explains “lobbying” versus networking and includes a step-by-step guide to contacting policymakers.
This report from the National Committee for Responsive Philanthropy discusses best practices and the impact of philanthropic dollars devoted to advocacy.
Funders in Action: An Example of Funder Advocacy
Texas education grantmakers knew that they needed to act when the state government cut $5.4 billion from the education budget in 2011. Funders began seeing the impacts quickly; requests for grants increased dramatically from organizations that used to receive support from public schools and public-private partnerships were in danger of falling apart. In response, funders formed the Texas Education Grantmakers Advocacy Consortium (TEGAC) to push back against the massive spending cuts. Because the group was focused on the budget -- and did not get into political ideologies or education reform debates -- it was able to convene and mobilize an unprecedented number of grantmakers throughout Texas. TEGAC also invested $100,000 in research to help shape the public narrative. The programs affected by the budget cuts were the same programs that studies proved to be effective! In May 2013, the Texas legislature reinstated $4 billion out of the $5.4 billion in education funds. Although TEGAC did not take credit for the restoration of funding, the mobilization of funders and the broad support for advocacy had a tangible statewide impact. Read more about this story here.
Please contact Amanda Andere if you would like to discuss advocacy issues further.
We believe philanthropy has a voice in addressing homelessness and advancing solutions to prevent and end it with the upcoming Presidential administration. As Funders Together to End Homelessness prepares for the administration transition, together with our national partners we are focused on continuing to make preventing and ending homelessness a bi-partisan priority. To accomplish this, we are focused on the following:
This page will serve as a collection of information that will continually be updated with new reports, fact sheets, websites, and other resources that support these priority areas.
1. Housing stability is an issue that affects education, health, and work force development. We believe in expanding the supply of housing, including affordable housing, and strengthen connections of these efforts with others to foster better health, economic mobility, and educational achievement.
- We are part of a multi-issue coalition advocating for The First Step to End Family Homelessness. The First Step plan from the National Alliance to End Homelessness outlines the proposal that will allocate $11 billion over ten years to provide children and families experiencing homelessness with short- and long-term rental assistance, and help to get into a home or apartment.
2. Early intervention that stops the cycle of homelessness and poverty is critical for youth and young adults.
- As a founding member of A Way Home America we believe the following transition priorities will be critical to systems change needed to provide a more stable future to our youth. The A Way Home America Transition Plan identifies actions and strategies necessary to prevent and end youth and young adult homelessness. The Transition Plan is intended to inform the next Presidential Administration, federal appointees, and members of congress on our collective goals to end youth and young adult homelessness.
3. Strengthening the connections between employment services and homelessness services to both prevent homelessness and ensure that exits from homelessness are permanent, stable, and successful.
If you have any questions regarding our transition priorities, or have a resource to share, please feel free to contact Amanda Andere at email@example.com.
At our 2016 Funders Institute, we focused on two very important topics for philanthropy: equity and advocacy. As part of an ongoing effort to provide support and programming on both issues, we've compiled resources that can aid you in starting and continuing the conversation around these topics in your work to prevent and end homelessness. We will be updating this page with timely resources as they become available, so be sure to check back often!
Putting Racism on the Table
In 2016, WRAG launched Putting Racism on the Table, a learning series for philanthropy. The series, from January - June 2016, convened philanthropic CEOs and trustees to learn from experts on the many aspects of racism, including structural racism, white privilege, implicit bias, mass incarceration, and the racial mosaic of this country.
Resources from the series are available on the WRAG website.
Why We Need to Talk About Racism and Family Homelessness
This Powerpoint from the Center for Social Innovation provides important background and data on the connection between racism and homelessness.
Homelessness, Racism, and Social Justice
Jeff Olivet, Center for Social Innovation, examines the connection between homelessness, racism, and social justice in this Huffington Post blog post.
Philanthropic Initiative for Racial Equity
The Philanthropic Initiative for Racial Equity provides publications, resources, and programming that can aid as you look to advance racial equity through your foundation. The goal of the initiative is to "increase the amount and effectiveness of resources aimed at combating institutional and structural racism in communities through capacity building, education, and convening of grantmakers and grantseekers."
Putting Grantees at the Center of Philanthropy
This series from the Stanford Social Innovation Review, in partnership with Grantmakers for Effective Organizations, focuses on grantee inclusion and provides perspective from both the philanthropic and grantee view on why and how making grantees the center of philanthropy can advance initiatives and help them succeed.
Integrating Racial Equity in Foundations, Governance, Operations, and Program Strategy
This paper from the Consumer Health Foundation provides an excellent overview of framework for organizing racial equity efforts within philanthropy.
Kathleen Enright, President and CEO of Grantmakers for Effective Organizations explains why having conversations around racial equity is critical and will require us to be vulnerable if philanthropy is to succeed in addressing race and making positive changes in their communities.
The Road to Achieving Equity: Findings and Lessons from a Field Scan of Foundations That Are Embracing Equity as a Primary Focus
This report from Putnam-Consulting Group and Robert Wood Johnson Foundation provides a look at some of the efforts leading foundations are making, as well as the challenges they face. Based on interviews with 30 foundation leaders, this report explores the ways in which foundations are applying principles of equity within their own operations - from grantmaking, to investments, to human resources.
Race Equity and Inclusion Action Guide
One way to achieve social change in an organization is to incorporate race equity and inclusion at every stage of work. The seven steps in this guide, from the Annie E. Casey Foundation, provide a clear framework for undertaking this important work. This tool adds to the resources already created by partners who have been working in the field.
How Would Terminating USICH Affect Efforts to End Homelessness? Preliminary Findings from Interviews with Federal Agencies, Communities, and Advocacy Organizations
This brief, by the Urban Institute and funded by FTEH members, including the Conrad N. Hilton Foundation, Melville Charitable Trust, Bill & Melinda Gates Foundation, Kresge Foundation, and Butler Family Fund works to understand the US Interagency Council on Homelessness’s (USICH’s) role in the nation’s efforts to end homelessness and potential effects of the agency’s planned termination in 2017.
The Legal Limitations on Advocacy
Funders can and should be advocates for policies and funding streams that can end and prevent homelessness. Understand the legal restrictions on private foundations’ advocacy efforts with this resource.
Webinar: Advocacy - The Funder's Role
Now is the time to strategize how we can best use our resources as funders to help advocate for innovative and effective solutions to ending and preventing homelessness. In this webinar, we examine the various roles a funder can take to advance advocacy efforts at all levels: local, state, and federal.
At Funders Together, we make it a goal to share the work of funders across the country so you can learn what's working and adapt these strategies to your own community. One way we do that is through our Featured Members. Some are featured because of their innovative grantmaking. Others are featured because they are making connections and bringing new people into the conversation about ending and preventing homelessness. Still others are featured because they are challenging the very systems that allow homelessness to persist. In each case, our Featured Members are an integral part of the solution to homelessness.
Miami Homes For All (formerly Miami Coalition for the Homeless) promotes community collaboration to prevent and end homelessness in South Florida through advocacy and philanthropy. Their work concentrates on advocacy, prevention, and informational services to enhance already existing community efforts and fill identifiable gaps.
We spoke with Bobbie Ibarra, Executive Director of Miami Homes For All about the organization's rebranding, its focus on housing, and successful advocacy efforts.
1. Let’s start with the basics. Many members may know you as the Miami Coalition for the Homeless, but recently you’ve become Miami Homes For All. Can you tell us a little bit about what lead to this “rebranding” and why it was important to your mission?
Barbara (Bobbie) Ibarra (BI): Miami Coalition for the Homeless was founded as an advocacy organization focused on protecting the rights of individuals experiencing homelessness. Back in the 1980s, there was a very high number of individuals living on the streets and because of this, there were many efforts to criminalize them. Business leaders in the community knew this was unacceptable and that a group was needed to focus on the issue of homelessness. When the organization was founded, many of the board members were experienced with legal services and wanted to create a movement around protecting and aiding people experiencing homelessness. Thus, Miami Coalition of the Homeless was born.
In 2001, we received proceeds from a surplus military property sale, made possible due to the Federal Homeless legislation. This allowed us to realign ourselves and evolve into a philanthropic organization. Through the transition, we maintained our commitment to advocacy by supporting policies that are instrumental to preventing and ending homelessness and that minimize the criminalization of those experiencing homelessness. Our grants complement our advocacy and offer the opportunity for agencies to provide innovative solutions to homelessness. Most of our work has always been about collaboration and advocacy, and this is still true today.
With a small endowment, we needed to think about sustaining as an organization and how to support our operations to keep funds focused toward grant making. When I joined the organization as Executive Director five years ago, it was during a recession and housing really took a hit. We always believed the housing was a critical piece to ending and preventing homelessness, but that gave us the impetus we needed to prioritize and elevate this community issue. This core focus on housing to end and prevent homelessness was the primary reason for our name change to Miami Homes For All.
2. This past year, one of your efforts, the Lazarus Project, became well received in the area and around the country and has been a great success. What led to the Lazarus Project and can you tell us a little bit about the challenges and opportunities around it?
(BI): While strides have been made in the community with ending episodic homelessness, chronic homelessness remains a strong challenge. We spoke with outreach workers and asked what we could be doing differently for those who were chronically homeless and living on the streets. A supervisor came forward and said that many years ago, as an outreach worker, he was called to the hospital where individuals experiencing chronic homelessness would be released into his care along with the appropriate medication. He took it upon himself to medicate them in order to ensure they were receiving the care they needed. He began to see a real transformation among these clients. They would become coherent and rational, and eventually could be moved into some sort of housing. He unsuccessfully tried for years to get funding for this work. After further discussion, I suggested that we start on a smaller scale so we began utilizing current resources and based on its success we provided the program a $24,000 grant to maintain the pilot with the goal of obtaining additional resources to bring the program to scale.
Camillus Health partnered to get the pilot off the ground by providing nursing staff and social workers to spend time doing outreach each day. All staff went out each day and medicated, assessed, and developed a relationship with the 12 individuals in the pilot program. This style of street outreach is entirely revolutionary and the program has successfully placed 49 clients in shelters, 2 in transitional and 12 in permanent housing and 50+ referred to permanent housing within the first year and a half. Our COC agency, the Miami-Dade County Homeless Trust, was impressed with the results and has since awarded a grant for over $660,000 to enable the program to add additional street teams and other needed resources. Thus, our efforts to have the program become sustainable is proceeding forward.
Some of the challenges of starting a project like this is risk-taking! We believe that we are the only ones in the country doing this type of targeted outreach. In all of our initial research we learned about the Assisted Outpatient Treatment program operating in both Albany NY and Seminole County, Florida. This program, however, is court ordered whereas the Lazarus Project is voluntary, based on engagement and trust. We had many unknowns we had to face when we first started, such as are agencies willing to experiment with getting individuals to voluntarily sign waivers or, are we in any way violating HIIPPA right? Building faith and confidence from parts of the community was a hurdle, but we were convinced that if it worked in the past with just one man undertaking this unique engagement strategy, then it was worth taking the chance and convincing other partners to join us. Nothing ventured, nothing gained!
Another challenge with this particular effort was the balancing of service delivery with the need for the collection of relevant data metrics. Being in the pilot phase of a program creates the issue of having very limited resources so you need to decide what is most important in terms of where to allocate funds and time. Data is very important in every project undertaken, but is especially critical when you are involved in a start-up pilot seeking to establish the foundation for a sustainable, scalable, and systemic initiative that seeks to convince others of its importance and relevance to solving an important issue.
3. Funders Together has members of all funding sizes, and we try to encourage members to think about what they can do outside of providing grants. Miami Home For All has made a large impact with a smaller budget in the Miami area so what advice do you have to other organizations who are working with smaller budgets?
(BI): Smaller funders should focus on building partnerships based on collaboration within the community to leverage limited resources. All of our work is based on this strategy. In particular, we have embraced the Collective Impact model for our youth homelessness work, which has been most successful.
We recognized that youth homelessness was gaining national attention and saw this as a huge opportunity to broaden our work in this area; however, we also realized that we did not have the capacity to undertake this initiative by ourselves. Thus, we sought out other funders to collaborate with us to support the creation of the backbone support organization, one of the five components defined in the Collective Impact model.
We now have 49 agencies working on 7 different committees designing a comprehensive system of care to prevent and end youth homelessness in our community. By engaging and convening the community in this holistic and collaborative manner, we have created a sense of unity, urgency and importance around this issue which we believe will result in more systemic, effective and sustainable community wide solutions.
4. You have been very active advocating for issues of homelessness in the Miami area. Many foundations and organization see advocacy as something that they can’t or shouldn’t attempt. Why advocacy is so important and what advice do you have for others who are considering doing more work around it? What makes advocacy efforts successful?
(BI): Everyone assumes philanthropy dollars are abundant and represent a significant financial resource. But in reality, it is actually small compared to the amount of government funds allocated to social services at both the federal, state and local levels. That is why we think that it is so important for philanthropy to leverage and compliment government programs that are aligned with best practices we know to be effective and that ultimately prevent and end homelessness through systemic change.
Partnering with appropriate policy leaders is really the only way to ensure this happens! Public/Private partnerships are at the core of successful and impactful change. You accomplish more by working together. With that being said, if philanthropy is going to support and compliment government programs, then we need to be able to influence what these polices are to ensure that they are the most effective. Thus, educating, informing and engaging policy leaders on best practices and evidence based solutions is one effective strategy for ensuring the development of the most relevant policies possible.
In order to be successful in advocacy, we believe that it is important that we make effective and compelling use of data analytics. Define and quantify the need you are trying to address, offer viable and meaningful solutions and document the economic benefits that will be achieved. In today’s world, it is not enough to discuss the resources needed to address a problem; we must be able to also define what the positive social and economic impacts will be realized when effective solutions are implemented.
If there is an opportunity to bring different sectors together – do it! It is an opportunity for all parties (philanthropy, non-profits, community leaders, business and local officials) involved to come together and discuss what needs to happen and who should be accountable for what. By doing this, you ensure that everyone is committed to the same strategies and policies so when you bring an issue to your leaders, you can display widespread community support.
I know that advocacy can seem daunting and finding a starting place can be overwhelming. But it can come in all forms: it can be as simple as providing a report that documents quantifiable solutions and outcomes or, it can be hosting a convening where relevant experts share their strategies and solutions. Education is a critical component of advocacy work.
One of our major advocacy successes was around our affordable housing work. We hosted the Homes for All Housing Summit this past year and as a result, the county has been undertaking new and innovative solutions to ensuring that we have the various types of housing needed in our community. For example, Miami Dade County has an Affordable Housing Trust Fund that was adopted several years ago; however, there was no prioritization as to how these funds would be allocated. Given our focus on preventing and ending homelessness, we, and our community partners, believed that the Trust Fund should allocate resources based on household needs within our community. To that end, the Commission did modify the Trust Fund to now allocate 50 % of the resources to either extremely low income or very low income households. This is a first for our community and a major win for Miami-Dade County. By convening a multi sector policy driven agenda event which resulted in people coming together to collaborate, we were able to leverage influence effectively and systemically.
5. Miami Homes For All is very involved in Funders Together Florida. What do you think are some of the benefits and opportunities of working with the network?
(BI): There are so many benefits! Networks are great for continuous learning. Working within a network gives you the opportunity to first learn from one another as well as it enables a group to invite experts to provide more up to date best practices. Networks also assist in engendering a collaborative and cooperative spirit. As I mentioned before, leveraging resources enables a small organization’s ability to be impactful.
In addition, while many funders focus their resources on their local community, when working in a network, you can have the ability to expand your impact both geographically and programmatically through partnerships. We have found it vital for funders interested in advocacy, to think about local, state and federal issues because each one has an impact on how we strategically utilize our resources. For example, not every community in Florida is working on youth homeless but through a network more attention and support for this work could be undertaken. Networks can bring this type of synergy to the table and make others aware of issues and ways around challenges providing many more opportunities.
As far as challenges, sometimes funders may not choose a more comprehensive or holistic approach to an issue that they are supporting. For example, grantors who funds in education may not see the correlation between homelessness and education yet it definitely exists. So as we try to engage others and build partnerships we need to recognize that sharing data and information that shows the integration of various sectors might be helpful in garnering important partnerships.
6. How can groups like Funders Together support organizations like yours?
(BI): The website and connection to best practices are amazing resources for us. When you are small philanthropic organization, having access to valuable research, resources and contacts is extremely important. The Communities of Practice and similar networks expose you to other people from whom you can learn a lot, very quickly! Funders Together is so phenomenal at providing opportunities to do that.
7. What advice would you give to organizations who aren’t currently focused on homelessness, but would like to start becoming more involved?
(BI): Most importantly, learn about what is the state of homelessness is in your community. Who are the key players you need to connect with? It is important to do your due diligence and find out who is involved and begin to engage with them. Relationship building is essential. Learn from them what they believe the critical community homelessness issues are: youth, family, veteran, chronic, or all the above?
You should also ascertain what is currently being funded by who in your community. Another great resource is learn if there are already existing networks or community groups within which you should become involved. Networking, engagement, learning and collaboration is what it is all about.
Interested in past featured member profiles? Check out our archive here.
Advocacy is a powerful tool to utilize in the work to end and prevent homelessness as it can educate, engage, and build essential relationships. And as funders, we can, and should, be a leading example.
Just a few weeks ago, the Los Angeles chapter of Funders Together to End Homelessness held its quarterly meeting to discuss the role of advocacy in moving the needle toward ending homelessness. The big question at the meeting: What elements of a successful advocacy campaign can philanthropy support to make greater impact?Read more
In order to end and prevent homelessness, we need adequate and affordable housing as well as appropriate income and employment opportunities. We must also work to prevent the next generation of homelessness by creating opportunities for our young people to live successfully in our communities.
We support Opening Doors, the Federal strategic plan to prevent and end homelessness.
1. To end homelessness, start with a home.
For families and individuals living in deep poverty, housing costs are the single most expensive item in the household budget. Nearly all pay more than half of their incomes for rent. This leaves limited resources available for food, clothing, child care, and other essentials. The loss of a job, an unexpected illness, or a family crisis can all too easily push a family into homelessness. Far too many children are sleeping in shelters.
At the federal, state, and local levels, we call for an aggressive, bipartisan push by government, working in tandem with the private sector, to:
Make rental homes affordable to more people by expanding the supply of rental housing subsidies. Rental assistance is a cost-effective, evidenced-based practice that is highly effective in reducing homelessness. It is the fastest way to make homes affordable to the greatest number of people with the lowest incomes. Currently, only one in four households eligible for rental assistance actually receives it.
Expand the supply of affordable rental homes by directing low-cost capital resources to the production and preservation of decent, safe rental housing. Pair capital investments with rental subsidies to ensure housing units are within the reach of households most vulnerable to homelessness. At the federal level, fully fund the National Housing Trust Fund and preserve the Low Income Housing Tax Credit Program.
Increase access to private market and public housing rental units by people experiencing homelessness and people with disabilities. Create unit set-asides within state- or city-financed multifamily housing.
Expand supportive housing options by increasing funding for services. The most successful intervention for ending and preventing chronic homelessness is linking housing to appropriate support services. Supportive housing ends the cycle of frequent and inappropriate use of expensive social supports and institutional care that people with complex needs cannot break while homeless.
2. Open pathways to meaningful and stable employment to prevent homelessness
We believe that our communities are stronger when everyone who wants to work can find a job. To this end, we must broaden opportunities for jobs, job training, and income growth so that people who are facing high barriers to employment, including people who have experienced homelessness, can effectively participate in the labor market.
We call for aggressive efforts by government at the federal, state, and local levels, working in tandem with the private sector, to:
Level the playing field by creating and adopting performance measures, under the new Workforce Innovation and Opportunities Act (WIOA), to Workforce Boards aimed at effectively serving clients with high barriers to work.
Increase the capacity of local workforce systems and other systems to effectively respond to the diverse work histories, education levels, and personal circumstances that people with high barriers to work present, so that they are connected to a spectrum of career pathways, training, and pre-training opportunities. Improve the way education, job readiness, training, placement, private employers, and support organizations work together to reduce barriers to employment for low-skilled workers. Share and disseminate best practices and successful programs, and create stronger connections between workforce systems and homeless service systems to reduce barriers to accessing employment services.
- Strengthen social enterprises that are successful in helping people who have experienced homelessness prepare for, find, and keep decent paying jobs within thriving industries.
3. Prevent a new generation from becoming homeless.
In every community, young people run away from home, are kicked out, exit the juvenile justice system with nowhere to go, become orphans, and/or exit the child welfare system with no supports to enable successful transitions to adulthood.
We call for action at the federal and state levels to:
Extend foster care to age 21 or beyond in all states, and ensure that all young people aging out of care have the opportunity to maintain safe housing until age 21 and beyond. Effectively use the period from age 18-21 to support young people in developing permanent relationships, pursuing educational and employment opportunities, securing housing, and developing skills to prepare them to live successfully in the community once they leave care.
- Reauthorize the Runaway and Homeless Youth Act, which provides three different grants to communities so they can reach out to homeless youth on the streets and provide emergency housing with crisis intervention, basic life necessities, family interventions, and when necessary, longer-term housing options, including Maternity Group Homes.
If you have any questions about our 2015 Policy Platform, please contact Anne Miskey.
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While there are numerous policies that may affect homelessness services and prevention, we know that success in the following areas will dramatically reduce the number of people and families experiencing homelessness. These are our policy priority areas for 2015.
Funders can and should be advocates for policies and funding streams that can end and prevent homelessness. Understand the legal restrictions on private foundations’ advocacy efforts with this new resource.
Funders networks have been critical to bringing together all kinds of grantmakers within a community and forging commitments to a systems approach. What are the key elements in building an effective funders network in your own community?
Until recently, modern family homelessness has been primarily addressed with temporary shelter or transitional housing and services to families during their crisis of homelessness. Funders are key players at the local, state, and national levels to lead the movement toward a systems approach to ending family homelessness.
Philanthropy’s role is to be catalytic, to not only make effective grants to prevent and end homelessness, but to help lead our communities—through education and advocacy, coordinating, collaborating, and convening—toward the necessary systems changes that must accompany what works. How do you get started?
Included in this resource:
- Ending Homelessness: An Overview for Funders
- Effective Grantmaking to Help End Homelessness
- Retooling the Homeless Crisis Response System
- Using Local Data for System Improvement
- Framing the Front Door: Coordinated Assessment
- Improving Housing Outcomes with Rapid Re-housing
- Solutions that Work to End Homelessness
The Homelessness Emergency Assistance and Rapid Transition to Housing (HEARTH) Act, passed in 2009, is the most important piece of federal legislation on homelessness in 20 years. HEARTH affects how homeless services are funded and delivered, including consolidating funding programs, increasing local flexibility, and introducing new community-level performance expectation. How can funders support this transition?
Included in this resource:
- Effective Targeting of Permanent Supportive Housing
- Refocusing and Repurposing Transitional Housing
- Targeting Prevention, Expanding Diversion
While there are numerous policies that may affect homelessness services and prevention, we stand behind these key policy principles.
We know that sequestration is hurting homelessness services around the country. This infographic is designed to give a brief overview.
We are seeing an encouraging trend: thought leaders working to end homelessness are focusing not on the successes of individual programs, but rather on a systemic approach that addresses the underlying causes of homelessness and uncovers the dynamics that can get communities stuck.
Today, in every state, a family that relies entirely on TANF for income cannot cover the cost of fair market rent. Funders can, however, play an important role in addressing the gap between state TANF benefits and Fair Market Rents, as well as strengthening the relationship between state TANF programs and housing programs.
The amount of legislative activity that is permissible for a section 501(c)(3) organization is dependent upon both the organization’s classification—that is, whether it is a “public charity” or a “private foundation”—and its size. Part I of this memorandum briefly describes the definition of legislative activities (i.e., lobbying) generally. Parts II and III address how much lobbying activity public charities and private foundations can engage in without jeopardizing their tax-exempt status. Part IV describes the interplay of the lobbying limitations in the context of private foundation grants to public charities that lobby.
Part I: Definition of Legislative Activities
An activity engaged in by a section 501(c)(3) organization, including advocacy, is treated as a legislative activity only if it is an attempt to influence legislation.
Lobbying activity may include attempting to influence legislation through direct contact with the relevant legislative body or indirectly through “grassroots” activities (i.e., lobbying aimed at persuading members of the general public to contact their legislative representatives.) Thus, a 501(c)(3) organization is generally regarded as attempting to influence legislation if the organization advocates the adoption or rejection of legislation by (a) contacting members of a legislative body (or their staff) with respect to legislation; or (b) urging the public to contact members of a legislative body with respect to legislation.
Legislation need not be introduced in the legislature for an organization to be treated as engaging in lobbying activities with respect to legislation. Rather, lobbying also includes specific legislative proposals that are either favored or opposed by the organization, even if they have not yet been introduced.
Legislation also includes the confirmation of administrative appointees, Congressional resolutions, state and foreign legislation, local and city council legislation, and referenda and ballot measures. It does not, however, include regulations or actions exclusively within the executive branch.
An organization can be treated as lobbying (or influencing legislation) even if it does so through an agent or gives money to another for the purpose of facilitating lobbying. (See Part IV of this memorandum, below.)
Not all activities that touch on legislative issues are treated for tax purposes as attempts to influence legislation. Educational activities that touch on legislative issues, but are objective and do not have a purpose of advocating for a particular position are not treated for tax purposes as attempts to influence legislation. For example, the publication of scholarly studies, or of objective, nonpartisan analyses of legislative proposals, will not necessarily be treated as restricted legislative activity even if these studies or reports endorse a particular position. On the other hand, the Internal Revenue Service (IRS) has taken the position in some cases that educational activity that is otherwise proper becomes improper (i.e., legislative) where the purpose of such activity is the active advocacy of some specific legislative program.
In addition, providing technical assistance at the request of the legislature by responding to a request to provide testimony at a congressional hearing is not treated as lobbying. Discussion with legislators of broad social or economic problems also does not constitute lobbying, as long as the discussion does not address the merits of specific legislation.
It is very difficult to draw bright lines in this area, and even a comprehensive review of the decided cases and rulings would be of limited help, because the determinations of the IRS and the courts tend to be very fact-specific.
As a general proposition, however, it can be said that 30-second TV spots or newspaper ads that advocate a particular position, that are one-sided, that do not present backup data or opposing viewpoints, and that are timed to tie into legislators’ or voters’ consideration of legislative proposals, will be vulnerable to attack as not being “educational” within the meaning of the Treasury regulations.
While a section 501(c)(3) organization may be able to engage in legislative activities described above, it cannot engage in any political campaign activities. Section 501(c)(3) organizations are not allowed to participate in, or intervene in, any political campaign on behalf of (or in opposition to) any candidate for public office, regardless of their tax classification as a public charity or private foundation. Even de minimis participation in a political campaign would jeopardize the organization's status as a section 501(c)(3) organization and/or result in the imposition of an excise tax upon the organization.
Part II: Permissible Legislative Activity by Public Charities
The Substantial Activities Test
The category of so-called “public charities” includes those charitable and educational organizations that enjoy a broad base of public financial support. Prominent examples would be the American Red Cross, the American Cancer Society, and the United Way. Such organizations are permitted to engage in legislative activity—both “direct” and “grassroots” lobbying—so long as such activity is not “substantial” in relation to the organization’s overall activity. What constitutes “substantial” activities has never been defined with any precision; as the IRS likes to say, it depends on all the “facts and circumstances” of the particular case. At least one decided case suggests that activity that represents less than five percent of an organization’s overall activity will not be considered substantial.
How legislative activity is to be measured is another unanswered question. Certainly, financial expenditures, both direct expenses and reasonably allocated overhead, will be considered. In addition, time spent by volunteer workers and other factors may also be considered in particular cases.
The Section 501(h) Safe Harbor
Because of the uncertainty regarding the scope of legislative activities that a public charity may engage in before those activities are treated as “substantial,” public charities often elect, under section 501(h), to have their legislative activities measured by a mathematical formula. As a result, the section 501(h) election effectively provides a safe harbor for permissible legislative activities. For an electing organization, the permissible amount of legislative activity is then determined by reference to the organization’s overall “exempt purposes” budget, as follows:
If overall budget is
The permissible lobbying limit is
Not over $500,000
20% of the exempt purpose expenditures
Over $500,000 but not over $1,000,000
$100,000 plus 15% of the excess of the exempt purpose expenditures over $500,000
Over $1,000,000 but not over $1,500,000
$175,000 plus 10% of the excess of the exempt purpose expenditures over $1,000,000
$225,000 plus 5% of the excess of the exempt purpose expenditures over $1,500,000
There is a statutory maximum lobbying limit of $1 million per year.
Of the amounts determined under the foregoing formula, 100% may be spent on so-called “direct lobbying” (i.e., lobbying directed at the persons who will vote on the legislation, which in the case of ballot initiatives includes the voting public). Under a separate statutory limitation, only 25% of whatever amount is determined under the foregoing formula can be spent on “grassroots lobbying” (as defined above).
Part III: Legislative Activity by Private Foundations
Private foundations are section 501(c)(3) organizations that typically have, and are supported by, investments and endowments producing income used for grant-making purposes and that do not receive substantial financial support from the general public. Private foundations, as a subcategory of section 501(c)(3), are defined in section 509 of the Code. Prominent examples are the Bill & Melinda Gates Foundation, the Ford Foundation, and the Rockefeller Foundation.
Pursuant to sections 4940 through 4946 of the Code, private foundations are subject to a series of significant restrictions that do not apply to public charities. Among these restrictions, section 4945 imposes an absolute prohibition on engaging in legislative activities. In other words, private foundations, unlike public charities, are not allowed to engage in legislative activity even to an insubstantial extent. The penalty for violations of these rules can range from tax penalties, measured by the amounts improperly expended for prohibited activity, up to revocation of the organization’s tax exemption (in certain cases of repeated or flagrant violations).
However, private foundations may engage in advocacy that is not treated as a legislative activity, such as permissible “educational” activity described in Part I of this memorandum. In addition, a private foundation will not be treated as attempting to influence legislation in discussions with governmental officials provided that:
- The subject of the discussions is a program which is jointly funded by the foundation and the government or is a new program which may be jointly funded by the foundation and the government;
- The discussions are undertaken for the purpose of exchanging data and information on the subject matter of the program; and
- Such discussions are not undertaken by foundation managers in order to make any direct attempt to persuade government officials or employees to take particular positions on specific legislative issues other than such program.
Part IV: Private Foundation Grants to Public Charities that Lobby
Amounts expended by a private foundation’s public charity grantees for lobbying activities can be attributed to the private foundation in certain circumstances. In particular, attribution can (and is likely to) occur when the foundation has earmarked its grant funds to be used to finance the lobbying activity in question. Of course, whether sufficient “earmarking” has occurred to result in attribution may be clear in some instances and not in others. The IRS has not developed specific rules to determine whether earmarking has occurred; rather, a facts and circumstances test is applied.
There are two types of grants that would ordinarily be permitted (i.e., the grants will not be treated as impermissible attempts to lobby by the private foundation):
- General support grants, so long as the grant is not earmarked to be used by the recipient public charity in attempts to influence legislation; and
- Specific project grants, so long as the grant is not earmarked to be used in an attempt to influence legislation and the sum of all grants made by the private foundation for the same project for the same year does not exceed the amount budgeted, for the year of the grant, by the grantee organization for activities of the project that are not attempts to influence legislation. In such a situation—setting aside the fungibility of money—the argument is that none of the foundation’s funds have been used for lobbying.
1 All section references are to the Internal Revenue Code of 1986, as amended (the “Code”) unless otherwise specified.
2 Treas. Reg. § 1.501(c)(3)-1(c)(3)(ii).
3 Treas. Reg. § 1.501(c)(3)-1(c)(3).
4 The Treasury regulations include an example in which a private foundation publishes a report on the use of pesticides, which concludes that the disadvantages of using pesticides are greater than the advantages and that prompt legislative regulation of pesticides is needed. The example concludes that the report is within the exception for nonpartisan analysis since it presents information on both sides of the legislative controversy and presents a sufficiently full and fair exposition on the pertinent facts to enable the public or an individual to form an independent opinion or conclusion. Treas. Reg. § 53.4945-2(d)(1)(vii), ex.2.
5 See Seasongood v. Commissioner, 227 F.2d 207 (6th Circ. 1955) (finding that legislative activities were not substantial).
6 Section 4911(c)(2).
7 Section 4911(c)(4).
8 Treas. Reg. § 53.4945-2(a)(3).
9 Treas. Reg. § 53.4945-2(a)(5)(i).
10 Treas. Reg. § 53.4945-2(a)(6)(i).
11 Treas. Reg. § 53.4945-2(a)(6)(ii).
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